Greek Leaders Agree to New Spending Cuts, Close to Fulfilling Troika Demands

Overnight, Greece's three main coalition leaders agreed on measures to reduce spending by approximately $12 billion over the next two years. These cuts amount to nearly all of the $13.8 billion in cuts which the Troika demanded in order to release the next tranche of bailout money to Greece.

Greece's international creditors -- the IMF, the ECB, and the EU -- are currently in Greece assessing the situation and the effectiveness of the implementation of the bailout conditions. Ekathimerini reports that new savings include a number of sensitive political areas such as reductions in pensions, benefits, healthcare spending and further cuts to civil servants' salaries. The possibility of extending the retirement age from 65 to 67 is also being examined, which would save more than 1 billion euros per year.

The leaders plan to reconvene on Monday to discuss where the remaining cuts will come from. Prime Minister Antonis Samaras of the conservative New Democracy party, Evangelos Venizelos of the socialist PASOK party, and Fotis Kouvelis of the leftist Democratic Left party have to decide where to trim. Conservatives would like to cut salaries of civil servants further, whereas the leftists and socialist would like to see salaries of military personnel cut.

Finance Minister Yannis Stournaras briefed the Troika representatives on the cost-cutting measures and suggested that some of them could apply from this year in a bid to front-load the program. As long as Greece is able to agree to the remaining $1.8 billion in cuts and implement them quickly, Troika representatives say they see no reason that the program should not go on as planned. This means that Greece should get its money and an imminent Greek exit is probably out of the cards.

On speculation of an imminent Greek exit, PASOK leader and former finance minister Evangelos Venizelos said, “If there are some who believe Greece must be sacrificed in order to save the eurozone, they are wrong. It would be suicide for [the single currency].” He was responding to comments made by the Bavarian finance minister calling Greece a black hole for money and that Greece "can't or won't make it [in the euro]."